College tuition costs have been a hot topic of discussion lately, with many people debating about whether or not college is worth the cost. According to new research from the Federal Reserve Bank of New York, a college education is still a sound investment.
In the study “Do the Benefits of College Still Outweigh the Costs?” economists investigated the cost of associate’s and bachelor’s degrees and return on investment and related benefits of earning a degree. More than forty years of data was used for this study.
The report took into consideration the increasing cost of college and the decreasing salary potential in some areas and still found that both associate’s and bachelor’s degrees had a return of about 15% for more than 10 years.
Though the cost of college has risen, the income of people without a college degree has steadily declined, allowing college graduates to have a higher income potential even after the cost of paying for college.
College is often less expensive than the listed price, the report states, due to how much financial aid and tax benefits are available to students.
To maximize the return on investment for a college education, the study shows that getting a degree in certain areas of study often yields a greater return. Specialization areas that offer training in a technical area, like technology or engineering often have higher returns.
Getting a degree in an in-demand area can also lead to a higher return. The high need for healthcare professionals in recent years has led to higher salaries and job outlook in this field.
The report also mentions that majoring in business often leads to a high return on investment for the cost of a degree.
Though liberal arts and hospitality degree holders had a lower return on investment than some of the other fields, every college major reached a return of more than 9 percent, showing that the investment had a positive return for all degree holders. This even held true for college graduates who are consistently underemployed.
Between 1982 and 2001, people with a bachelor’s degree made almost 80% more than people who had only a high school diploma. People with an associate’s degree made almost 30% more than people with a high school diploma over the same time period, according to the study.
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